Blue Chip Stocks - Buy and Hold Forever? (Avoid the Value Trap!)

In this video, I will share with you why blue chip stocks are not invincible and how you can avoid falling into a value trap - not all of them can be held forever!

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🔽Time stamps:
0:00 Introduction
1:12 History of the top S&P 500 companies
2:32 Factor #1 - Lack of innovation
3:45 Factor #2 - Inability to pivot
5:12 Factor #3 - Incompetent CEO
7:43 Prime example of a thriving blue chip company
9:02 Answering today's question
10:04 Outro

"We sometimes say that we plan to hold certain stocks forever, but do you think today's blue chips will still be good to hold decades from now?"

A blue chip stock is a nationally recognized, well-established, and financially sound company. Blue chips generally sell high-quality, widely accepted products and services. Blue-chip companies are known to weather downturns and operate profitably in the face of adverse economic conditions, which helps to contribute to their long record of stable and reliable growth.

Think companies like Coca-Cola, Disney, PepsiCo, Walmart, General Electric, IBM, Apple, Microsoft, and McDonald’s, which are dominant leaders in their respective industries.

Due to their stability, blue chip stocks can be trading at a lower premium compared to the younger growth stocks, and as such may present as buying opportunities for investors but are actually misleading. A value trap is often a poor investment: the low price and low multiples mean the company is experiencing financial instability and has little growth potential.

Some prime examples of past blue chip companies that have fallen the ranks are Nokia, IBM, General Electric and many more! Read more in the articles below.

👀Nokia: https://www.feedough.com/why-did-nokia-fail/

👀IBM: https://www.zdnet.com/article/what-went-wrong-at-ibm-its-master-plan-has-failed-to-deliver/

👀General Electric: https://www.businessinsider.com/the-rise-and-fall-of-general-electric-2019-8

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Disclaimer: This content is provided by a paid Influencer of Interactive Brokers. Influencer is not employed by, partnered with, or otherwise affiliated with Interactive Brokers in any additional fashion. This content represents the opinions of Influencer, which are not necessarily shared by Interactive Brokers. The experiences of the Influencer may not be representative of other customers, and nothing within this content is a guarantee of future performance or success.

None of the information contained herein constitutes a recommendation, promotion, offer, or solicitation of an offer by Interactive Brokers to buy, sell or hold any security, financial product or instrument or to engage in any specific investment strategy. Investment involves risks. Investors should obtain their own independent financial advice and understand the risks associated with investment products and services before making investment decisions. Risk disclosure statements can be found on the Interactive Brokers website.

Interactive Brokers is a FINRA registered broker and SIPC member, as well as a National Futures Association registered Futures Commission Merchant. Interactive Brokers provides execution and clearing services to its customers. For more information regarding Interactive Brokers or any Interactive Brokers products or services referred to in this video, please visit www.interactivebrokers.com.

Видео Blue Chip Stocks - Buy and Hold Forever? (Avoid the Value Trap!) канала Ziet Invests